June 1 Reinsurance Renewals - Pricing Worsening - Not Bottoming In Our View

Research evidence excerpt

June 1 Reinsurance Renewals - Pricing Worsening - Not Bottoming In Our View

Nonlife Insurance

June 1 Reinsurance Renewals - Pricing Worsening - June 2, 2026

Not Bottoming In Our View

We strongly reiterate our UW weighting on the sector - supported by recent

broker commentary on June 1 reinsurance renewals. The success of Florida tort

reform (a delayed reaction from the 2023 effective date) is driving pricing down

at an accelerated pace. We feel even stronger about our call in Sept. '25 that

reinsurers' return on capital will converge with their cost of capital in 2027 (which Tracy Benguigui

Howden now echoes). While tort reform is driving improved claims frequency/severity tbenguigui@wolferesearch.com

(646) 419-2560

in Florida, we are increasingly worried about reinsurers taking more catastrophe risk View Tracy’s Research

on the EP curve as cedents are buying more cover. The stocks that should be the most View Comp Table

impacted from weak pricing headlines are EG given its more strategic property growth Dean Criscitiello

focus and RNR given its reinsurance only business model - though we think RNR will dcriscitiello@wolferesearch.com

646-419-2562

get preferred pricing and terms vs. the market.

Key Takeaways:

●Reinsurance broker commentary indicates property catastrophe reinsurance

pricing declines of (15)-(25)% on a risk-adjusted basis at June 1. June 2026

pricing is largely in-line with June 2021 levels.

●Double-digit increase in demand (>12% according to GC's Florida composite)

isn't making up for lower pricing. Drivers: historically low Citizens policy

counts, compounding retained earnings growth by carriers (especially Florida

domestics), and new carrier formation.

●Abundant capacity across the tower, with both traditional reinsurers and